01/08/2015 – 
A little-noticed OIG report bolsters the union’s position that mail processing plants are crucial to Postal Service operations and should not be privatized.
Many Americans view the Postal Service as having only two components: those who deliver mail and those who assist you at the window, the Dec. 8 report notes. Some have argued that focusing on these two sectors – and allowing private companies to take over mail sortation and transportation – would improve efficiency and cut costs.
The OIG report, “The First and Last Mile Strategy: A Critical Assessment,” demonstrates that these claims are false. “The Postal Service and the mailing public would suffer if the Postal Service ceased its mail processing operations,” the study finds.
“The mail processing activities of the Postal Service play a vital role in ensuring the productive and allocative efficiency of the postal sector, even in the absence of economies of scale in mail processing,” wrote John Panzar, the study’s author, who is a professor of economics at the University of Auckland. Panzar developed a theoretical model that shows that if the Postal Service completely eliminates the mail processing of letters and flats, there would be an overall loss in efficiency.
“The likely result of the Postal Service ending its mail processing activities would be lower profits for the Postal Service and higher prices for the mailing public. Competitive mail processors are the only likely beneficiaries,” Panzar concluded.
While the report focuses on processing plants, Panzar notes that it includes any transportation related to the “middle mile.”
”The OIG report proves what the APWU has been saying: Mail processing and transportation are essential to a vibrant, productive Postal Service,” said APWU President Mark Dimondstein. “This is another powerful argument against closing or consolidating 82 mail processing facilities and subcontracting transportation,” he said.
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Enough of the parcel volume bypasses the USPS network already that it is a defacto privatization of the only growing part of the business. We are left with the point source originating mail that is the least “profitable.”
Flats and letters will dry up of their own accord. What will be left? My friends outside of the business would absolutely choose to stop all delivery of bulk mail, especially the flyers, if given a chance. Just like phone books, a moldering pile of which I walked by this morning outside of an apartment building, people don’t want the bother of recycling it.
I’m always wondering who’s really in charge, I’ve never seen a boss do so much to damage or degrade the company. They have wasted so much money on doing repetitive jobs, and finding something for the top heavy managers to do, it’s down right scary. They send out the Voice Of the Employees surveys but all that I’ve seen come out of it, is tactics to pressure the letter carriers to move faster. And don’t include a remakes column so you can really tell them what you think. The FSS machine is a waste of money or every station would have them. I’ve seen the same monitoring system for DPS mail that comes incorrectly, still being done well over 10 years and no sense of improving or stopping it. It appears the higher ups can’t stand being told they are wrong or heading off course.
The service takes a beating now , what do you suppose for instance FedEx or UPS among others who already > USE < the USPS for what they don't want to deliver , would do with the security of your 1st class service ?
Too bad U.S.P.S management ignores their own OIG reports. I remember the OIG recommending stopping FSS deployment until all the bugs worked out if that is even possible.